Court Rules NGM Cannot Deny Validity of Montanari Gas Ship Charters

February 8, 2002

The English and Isle of Man courts granted injunctions against Navigator Gas Management (NGM) and Vela Energy Holdings Ltd in a dispute over the proposed long-term chartering of five gas tankers in the Navigator Gas Transport (NGT) fleet managed by NGM. The English injunction forbids NGM from taking any action which amounts to a denial of the existence of the Montanari charters and from suggesting to any third parties that the charters are ineffective. This follows claims made by NGM in the trade press and in brokers' reports that the Montanari charters, concluded on November 30 last year, are invalid. The wrangle over the charters can be seen against the wider background of Vela's involvement in an ongoing dispute over ownership of shares in Arctic Gas Holding SA of Luxembourg, the ultimate parent company of the Navigator
Group. Vela claims to have bought 51 per cent of the shares in Arctic, but the sellers of the shares maintain that Vela has failed to meet the conditions of sale and is therefore not entitled to retain the shares it has bought.
Vela representatives control the boards of NGM and Navigator Holdings(NVIGF.PK), the sole shareholders of NGT. The boards of NGT and of the five companies who own the vessels which make up the NGT fleet are still controlled by the original shareholders who are in dispute with Vela over the sale of their shares.

Vela recently took action in the courts of the Isle of Man to prevent the sellers of the shares displacing Vela-nominated directors. But yesterday, in a mirror-image action, a magistrate in the Isle of Man granted an injunction prohibiting the Vela interests from taking any action to try to remove the representatives of the sellers of the shares from the boards of NGT and the shipowning companies.
Michael Lax, a partner in London law firm Lawrence Graham, which represents the sellers of the shares, welcomed the latest London and Isle of Man court decisions, claiming, "The fight will continue, but this round has been won by the sellers and the owners of the ships."

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